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Workplace wellness programs that focus on life planning could see stronger ROI

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The Financial Wellness Think Tank at Financial Finesse, a U.S. provider of workplace financial wellness programs, in March 2018 released research that studies the relationship between an employee’s financial well-being and how they manage key life events.

The report looked at the concept of life planning: the idea that the events which take place in our lives have certain financial implications that can be planned for, and even sequenced in some cases, for the best possible financial outcome.

It focused on three key life events—owning a home, getting married, and having children—related to an employee’s financial wellness, and how preparing for these life events (for those employees who choose to pursue any of these milestones) is a major driver in long-term financial security.

Key findings from the report include:

  • Home ownership had by far the greatest positive relationship to financial wellness. Of those employees who own a home, 78 percent have a handle on cash flow vs. 63 percent of non-homeowners; 59 percent have an emergency fund vs. 34 percent of non-homeowners; and 64 percent are comfortable with their debt load vs. only 44 percent of non-homeowners.
  • Marriage is financially beneficial, but the financial benefits are linked to housing and family stability. Recognizing marriage provides economies of scale with the sharing of expenses in dual-income houses, married homeowners have significantly lower levels of high or overwhelming financial stress than married non-homeowners. There is, however, no discernible difference in the financial wellness of married and single employees who do not own a home or have minor children.
  • Having children, as expected, had a negative relationship to financial wellness, though somewhat mitigated by marriage and homeownership. Employees with minor children had lower levels of financial wellness regardless of home ownership or marital status.

Greg Ward, director of Financial Finesse’s Financial Wellness Think Tank, says while the research does only analyze these three life events, how employees financially prepare for any major life goal or event can have a major influence on their overall financial wellness.

The Think Tank estimates the value of planning for these life events at over $150,000 for the average employee over the course of their lifetime. That equals about $10,000 in additional annual income in their retirement years. “This is more about making a mind shift in the way we, as a society, approach financial planning,” he says. “It needs to start with providing people financial mentorship to help them reach their personal life milestones and build a solid financial foundation.”

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